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Mr. Gregory Barker (Bexhill and Battle): On a point of order, Mr. Speaker. Is it not unprecedented for a debate of this importance to be held without the attendance of a single Cabinet member bar the Secretary of State?

Mr. Speaker: Order. That is not a point of order.

Mr. Byers: The advice that I gave to my Cabinet colleagues was not to be too exercised by a half-day Opposition debate. To be honest, most Cabinet members have far more important things to do than to listen to the rubbish that we have heard today from Opposition Members.

I was about to give the House the benefit of the Rail Regulator's view on Railtrack. Asked whether he would have provided extra funds for Railtrack, he said that he had no duty or inclination to give taxpayers' money to a company to make up for its being inefficient and incompetent. It was possible, he said, that the company thought that if he would not give it money for being inefficient and incompetent, maybe the Government would. He thought that that was

Mrs. May rose

Mr. Byers: No, I will not give way. The hon. Lady has had her opportunity: she has intervened four or five times, and she has not scored a hit so far.

Interestingly, one group did very well out of Railtrack. We have heard about the dividends paid over the years—£700 million—but the other group that did well was the directors of Railtrack. My hon. Friend the Member for Reading, West (Mr. Salter) gave the figures: the directors were paid more than £10 million between 1996 and 2001, including £1.3 million paid to Gerald Corbett, Railtrack's chief executive. This is the man who told Members of Parliament in the year before the crash at Ladbroke Grove that the tracks outside Paddington were safe. Lord Cullen described those comments as complacent or misleading.

We have heard it all before, and we will hear it all again. This is the Tory privatisation culture that led the chief executive of Railtrack to tell Members of Parliament that the tracks outside Paddington were safe, which, according to Lord Cullen's investigation, was complacent or misleading. Two days after his report, which said that Gerald Corbett was complacent or misleading, Railtrack revealed the payment of £1.3 million. It is clear that the only things that Railtrack could get working on time were the executive compensation schemes.

This country has the fourth largest economy in the world, but we do not have a railway service to match it. Action was needed to put the interests of long-suffering rail passengers first. They know that Railtrack has been at the heart of the problems experienced by the industry—a company that failed to offer an adequate service, and then came asking for yet more taxpayers' money.

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The Tories, in this debate and previously, have backed the interests of a quarter of a million shareholders against the interests—[Interruption.]

Mr. Speaker: Order. Hon. Members should not shout.

Mr. Byers: The debate will show clearly that the Tories are backing the interests of 250,000 shareholders against the interests of 2.5 million people who travel on the railway network every day. They cannot come to terms with the fact that a failed privatisation has been ended by the Government.

Delivering to passengers will now come before dividends for shareholders. Our people and our country deserve a railway system that is fit for the 21st century, and, no matter what the criticisms may be, we shall make the decisions that are necessary to enable that to happen.

Mr. John Smith (Vale of Glamorgan): On a point of order, Mr. Speaker. Can you offer me some guidance? I think that, during my right hon. Friend's speech, an Opposition Member intervened claiming to be a shareholder in Railtrack. I may have misheard, but I understood that that was what was being said. Given the nature of the debate—part of whose purpose is, I understand, to shore up the share value with taxpayers' money—is it in order for shareholders to take part in it, or not to declare an interest?

Mr. Speaker: It is up to individual hon. Members to declare an interest. Additionally, I remind hon. Members that we must have some calmness in the Chamber.

4.45 pm

Mr. Don Foster (Bath): I begin by joining the hon. Member for Maidenhead (Mrs. May) and the Secretary of State in expressing sympathy to all who were affected by the dreadful air crash in New York yesterday.

Given that so much desperately needs to be put right about our railways, it is regrettable that precious parliamentary time is being spent on a debate that is largely about who said what to whom, and when that was said. We have failed to address the key problems of our railways for far too long. It is a great pity that the Labour Government failed to act more quickly. It is also a great pity that, in this debate, we have not heard a single, solitary solution to the problems of the railways from any Conservative Member. Even worse, no Conservative Member recognises the nature of the real problems that faced Railtrack and that needed to be resolved. Despite the excellent work of many Railtrack employees, there were significant worries about the organisation, and reference has already been made to the matter of golden goodbyes. Although the Secretary of State referred to Gerald Corbett, he forgot to add that it was Gerald Corbett who apologised for Railtrack's failures.

There have been numerous worries about Railtrack's repeated failure to meet each of the new deadlines that it set itself in order to get back to so-called normal following the Hatfield tragedy. There have been worries about the management and supervision of sub-contractors, and about cost overruns. Many people who saw the work of Railtrack at close quarters have expressed considerable worry. Much of the debate about Tom Winsor's evidence to the Select Committee on Transport, Local Government

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and the Regions last week has been about whether he was threatened by the Secretary of State. Sadly, little attention has been focused on some of the Rail Regulator's other comments about precisely what he thought about Railtrack as an organisation. He said that he believed that they were the authors of their own misfortune, and that the core problem was the competence of the management of the company. He added that

Amazingly, the Rail Regulator went on to say that, for the life of him, he could not understand why a company that depended so much on its assets should have failed to produce a proper detailed asset register. He had to ask Railtrack on three separate occasions to produce voluntarily such an asset register and, when it failed to do that, he had to make its production obligatory. Tom Winsor was clearly worried, as were the train operating companies.

It is worth reflecting that over the past four weeks—from 13 October—there has been a significant decline in passenger numbers on our railways. Approximately 2 million people have abandoned the railway system. Phil White, the chief executive of National Express, which is one of the largest train operating companies, was asked the reason for that. He made it clear that he blamed Railtrack and, not least, passengers' increasing frustration with the number of speed restrictions that are still in place.

Of course something had to be done—not least because of the financial viability of Railtrack. In January, the company was placed on credit watch and then its credit ratings were dropped. On 18 February, Railtrack itself announced that it was significantly slashing its five-year investment programme. On 2 April, Railtrack went round with its now infamous begging bowl, asking for additional money.

Chris Grayling: As the hon. Gentleman is giving the same speech that he gave in Westminster Hall this morning, perhaps I could make the same intervention that I made then. Does he agree that one of the reasons for the financial pressures on Railtrack was that the regulator had given the company what amounted to, in effect, a standstill budget for the next five years for repairs and maintenance of the network, despite the fact that the company was being asked to preside over a 50 per cent. increase in passenger numbers over the next few years?

Mr. Foster: Let me shock the hon. Gentleman by giving him the same answer that I gave him in Westminster Hall: he will be well aware that, before that time, Railtrack had already decided to slash its investment budget. Furthermore, let me give him some additional information that I did not give him in Westminster Hall: it is clearly on the record in the Rail Regulator's evidence to the Select Committee that, on many occasions, he had made the offer to the company that it could come to him for a further review, but it failed to take up that offer. It is further evidence of real concern as to the competence of the management of the company that it failed to take up such offers.

It is also important to consider what happened as we came nearer and nearer to the Secretary of State's decision. On 24 May, Railtrack reported an annual loss of £534 million and the share price fell by a further

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3.7 per cent. Throughout the life of the company, the general trend of its share price has been downward. By 6 June, the share value had fallen so low that the company was ejected from the FTSE 100. Interestingly, one of the main commentators, A.B.N. Amro noted:

It is a great pity that Railtrack's management did not warn shareholders of that situation.

Amro also pointed out that Railtrack

It was thus hardly surprising that, on 12 June, the Rail Regulator advised Railtrack to stop hawking its begging bowl around.

In August, as the Secretary of State has already told us, Railtrack's own advisers suggested that there were only three options: restructuring, renationalisation or receivership. As all those problems were mounting, it makes perfect sense to those of us on the Liberal Democrat Benches that the Secretary of State had to act. He had to do something in the interests of the public.

Although the Secretary of State must bear some responsibility for the way that he acted—as I shall explain in a moment—the shareholders, whose grievances have been so loudly expressed by Conservative Front Benchers, should be looking to the real author of their difficulty: not the Secretary of State, but mainly the management of Railtrack.

I fully realise that many of those shareholders are Railtrack employees, but I hope that they will reflect on the interesting fact that on 25 July the company was prepared to hand out to its employees shares worth £5 million, but two weeks later began to develop plans to slash one in 12 of the work force. That is the measure of its regard for its employees.

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